The Failed Promise of Market Timing
I’ve long believed the most difficult part of being a Couch Potato investor is resisting temptation. Index investors are asked to be content with market returns, but they are bombarded daily by fund...
View ArticleAsk the Spud: Is There an Optimal Portfolio?
Q: I’m new to passive investing and am deciding how to allocate between the asset classes. The best split between Canadian equity, international equity, etc. should be determinable based on studies of...
View ArticleThe True Cost of Foreign Withholding Taxes
Back in the fall of 2012, I wrote a pair of blog posts about the impact of foreign withholding taxes in US and international equity funds. The first explained the general idea of this tax on foreign...
View ArticleWhy Currency Hedging Doesn’t Work in Canada
In the last two years, Canadian ETF providers have finally launched US and international equity ETFs that do away with currency hedging. Yet the strategy remains hugely popular: the hedged versions of...
View ArticleDo Bonds Still Belong in an RRSP?
It has long been conventional wisdom that bonds should be held in RRSPs wherever possible, since interest income is fully taxable. Once you run out of contribution room, equities can go in a...
View ArticleHow to Estimate Stock and Bond Returns
Even the simplest financial plan requires assumptions about how your investments will perform. We know these assumptions can never be perfectly accurate, but they need to be thoughtful and reasonable....
View ArticlePutting the Portfolio Odds in Your Favour
It’s well known that the majority of actively managed mutual funds underperform comparable index funds over any period longer than a few years. In fact, that statement has become so uncontroversial...
View ArticleAfter-Tax Returns on Canadian ETFs
When you invest in a non-registered account, you need to be concerned about more than just your funds’ performance: you also need to know how much of your return will be eaten up by taxes....
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The Role of Preferred Shares
Preferred shares are often considered a hybrid security, since they share characteristics of both common stocks and corporate bonds. Like bonds, preferreds typically have a predictable income stream....
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Ask the Spud: Do Aggressive Portfolios Pay Off?
Q: I noticed that over the long term (10 to 20 years) the average returns of your model portfolios are quite similar regardless of the asset allocation, but the maximum losses vary dramatically. Would...
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How Bad Data Leads to Poor Investment Decisions
Making smart investment decisions is difficult enough when you have reliable information. If you’re working with inaccurate or misleading data, good decisions become almost impossible. The most popular...
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Raining on the All Seasons Portfolio
Investors are hungry for success stories, especially tales that include high returns with low risk. And the investment industry is always happy to stoke that appetite. One of the most popular stories...
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How Contributions Affect Your Rate of Return
Whenever I update the returns of my model portfolios, readers ask how the performance would have been different had they added money to the portfolios money each month. This question gets to the heart...
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Is Beating the Market Harder Than Ever?
Is beating the market harder than it’s ever been? Larry Swedroe thinks so, and he lays out his case in his newest book, The Incredible Shrinking Alpha. PWL Capital has just published a custom edition...
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It’s Better With Beta
The title of Larry Swedroe’s latest book, The Incredible Shrinking Alpha, raises a question: what happened to the idea that skilled managers can consistently beat the market? In a recent interview with...
View ArticleHow Long Will You Wait for Smart Beta to Work?
In my last post I shared some insights from Ben Carlson’s A Wealth of Common Sense, which argues that investors are generally better off keeping their portfolios simple and straightforward. This idea...
View ArticleWhat (Returns) to Expect When You’re Expecting
Investing decisions should always be made in the context of your overall financial plan. And although we know short-term forecasts are futile, a retirement plan needs to include some assumptions about...
View ArticleThe Next Smart Beta Revolution
{Note: This post was an April Fool’s joke!] As the ETF industry in Canada matures, more and more providers are moving away from traditional cap-weighted index funds in favour of more exotic strategies,...
View ArticleAfter-Tax Returns on Canadian ETFs
When you invest in a non-registered account, you need to be concerned about more than just your funds’ performance: you also need to know how much of your return will be eaten up by taxes....
View ArticlePodcast 6: Wishing Upon a Morningstar
Are truly active managers more likely to beat the market than those who stay closer to their benchmark index? In my latest podcast, I discuss this idea with Christopher Davis, a strategist and...
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